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[FCE] Sam Altman issues ‘code red’ at OpenAI as ChatGPT contends with rivals

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The rivalry within the artificial intelligence sector is intensifying, prompting a significant reaction from one of its leading companies, OpenAI. The company’s chief executive, Sam Altman, has recently issued a ‘code red’ alert internally. This type of declaration is reserved for matters of the highest priority, signalling that the company is facing a serious challenge that requires its full attention. The primary cause for this alert is the escalating competition from formidable new rivals, particularly the technology giant Google.

The pressure on OpenAI has mounted following Google’s recent launch of Gemini 3, its latest and most powerful AI model. Reports indicate that Gemini 3 has outperformed other models, including OpenAI’s famous chatbot ChatGPT, on a variety of standard industry tests, known as benchmarks. In a memo to employees, Mr. Altman acknowledged the potential consequences of this development, warning of ‘temporary economic headwinds’ and admitting that the general perception of the company’s market position might be ‘rough for a bit.’ This suggests he anticipates a period of financial difficulty and a challenge to their reputation.

In response to this competitive threat, OpenAI is strategically shifting its focus. The company is now dedicating more of its internal resources towards enhancing the capabilities of ChatGPT. In a move that underlines their focus on product quality over immediate profit, OpenAI has also decided to postpone its plans to introduce advertising into the chatbot. This decision highlights a commitment to strengthening their core product to meet the new standard set by competitors.

The effects of Gemini 3’s arrival are being observed across the technology industry. For instance, Marc Benioff, the influential CEO of Salesforce, publicly announced he was switching his allegiance from ChatGPT to Gemini 3 after being impressed by its ‘insane’ leap in performance. This is not an isolated event; other major players like Apple are also making strategic adjustments, such as hiring new executives to lead their AI divisions. These developments illustrate just how rapidly the entire technology landscape is being forced to adapt to the fierce pace of AI innovation.

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1. What is the main reason OpenAI’s chief executive declared a ‘code red’?

  • A. To announce the launch of a new product.
  • B. To prepare the company for financial failure.
  • C. To address a serious competitive threat from another company.
  • D. To change the company’s internal management structure.

2. According to the text, what was Sam Altman’s message to his staff regarding the situation?

  • A. He confidently stated that OpenAI would remain the market leader.
  • B. He warned them about possible financial difficulties in the near future.
  • C. He criticised his employees for the company’s poor performance.
  • D. He announced an immediate plan to introduce advertising.

3. What has OpenAI decided to do as a direct consequence of Google’s new model?

  • A. Form a partnership with Salesforce.
  • B. Delay a plan that was aimed at generating revenue.
  • C. Reduce the resources available for improving ChatGPT.
  • D. Release a new AI model to compete with Gemini 3 immediately.

4. The example of the CEO of Salesforce is used to illustrate…

  • A. that Gemini 3’s performance is not as good as reported.
  • B. the widespread and tangible impact of the new AI model.
  • C. a personal disagreement between two company leaders.
  • D. that most companies are still loyal to ChatGPT.

5. In the final paragraph, what does the phrase ‘switching his allegiance’ mean?

  • A. Changing his opinion about the importance of AI.
  • B. Selling his shares in one company to buy shares in another.
  • C. Moving his professional loyalty and use from one product to another.
  • D. Forming a new business partnership with a rival company.